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39 views

What is the economic interpretation of the solution of this optimal control problem?

I have the following optimal control problem $$\max_{c_t} \int^{\infty}_0 e^{-p_it}\ln(c_t(i))dt$$ subject to $$\dot{w_t}(i)=rw_t(i) -n_ic_t(i)$$ $$w_0(i)=w_0>0$$ I have some wealthy and ...
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19 views

How monetary profit is possible if aggregate prices exceed public purchasing ability?

When firms produce products, they pay households for labor. Later households use the earned money to purchase those same products... but since households purchasing ability is equal to firms' ...
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0answers
13 views

Who is the first one to equate “rational” with “complete and transitive”?

MWG taught that, suppose that the menu is finite, "rational" is the same as "complete and transitive". But it seems that it does not cite any sources. Who said this first? vNM said in 1944 that their ...
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1answer
24 views

How to calculate Real GDP from quarterly change

How do I calcualte a countries Real GDP from QoQ changes? Example - Australia 2018 - Real GDP was 1432195178668.32 $Billion 2019 Q1 was 0.5% 2019 Q2 was 0.6% 2019 Q3 was 0.4% How do I calculate ...
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7 views

Comparable data on second-hand market?

I see neither the WB nor the OECD collect data on second hand markets. However, estimates for fashion, for example, suggests this are quite significant (US here: https://luxiders.com/second-hand-...
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2answers
28 views

Does demand side economics only apply to manufacturing

For example, if investment falls then manufacturing falls. but there is no investment in secondary markets. Wouldn't recessions cause factories to collapse but why would they affect realtors, used ...
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1answer
26 views

Question regarding couple economic terms and concepts

I am trying to read some economic articles for future use. However, as a statistics major student, I am quite unfamiliar with couple of economic vocabs and concepts. Followings are the very vocabs. -...
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1answer
41 views

What does “steep incentive contract” mean in the context of adverse selection?

This term was mentioned in a slide and when I looked online, the only thing which I could find talking about this is this paper. For example,in the cost-plus-incentive contract $$x(T, c) = a(T) - a'...
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55 views

Intuition for factor price insensitivity in Heckscher-Ohlin

I'm trying to develop some intuition for why factor prices are independent of factor endowments in a small open economy (in a standard Heckscher-Ohlin 2x2x2 setting with diversification and no factor ...
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6 views

What was the difference between the UK government’s special liquidity scheme and quantitative easing?

How exactly were the two schemes related and was the lending of treasury bills the same as electronically creating money to buy bonds?
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47 views

Combine Gini index with GNI/capita (PPP) to produce an indicator which gives the same weight to low percentile incomes as to high percentile incomes

Consider the attached charts, which illustrate that low-inequality Country A can have both a lower average income and higher average log income than high-inequality Country B. This sparked my interest ...
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26 views

Stock price and exchange rate is correlation, but VAR model order is zero

It is well known that Japanese stock price and exchange rate(USD/JPY) is correlation, So I built a VAR model in python about stock data(Tokyo stock price index) and exchange rate(USD/JPY) and I fitted ...
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0answers
20 views

SPV company and deal outline - need your guidance

Hi I'm new to the real estate investments world. I would like to invest in a real estate deal in Greece kind of PE acquisition of purchasing a building in Athens The company (the GP) has invested ...
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0answers
14 views

Value Added Approach of GDP calculation

Suppose I sell bread loaf for 20 dollars, the cost of raw material like oil,flour,electricity.... is 13 dollar, I pay 2 dollars to my workers, 1 dollar to transportation company to transport it to ...
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0answers
12 views

Uniform price vs discriminatory price double auction

Uniform price and discriminatory price double auctions are the most commonly used auction mechanisms in the trading markets especially in peer to peer energy trading markets. However, I could find ...
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0answers
15 views

How to calculate clearing when supply demand curve do not intersect

I am working on a P2P energy trading project and want to implement a uniform price double auction. I have confusion about how the clearing price will be determined if the supply-demand curves do not ...
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2answers
45 views

Is it correct to say opportunity cost is cost of giving up quantity of what you are selling?

In this video (https://m.youtube.com/watch?v=KEYYN-a_x6E), the instructor talks about the marginal opportunity cost and supply curve. (Begins talking about it at after 1:50). He states that the ...
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0answers
16 views

Data for producer prices for products

I am working with some data that express the environmental byproducts for the manufacturing of specific broad product categories (e.g. milk, soap, leather). The statistics are given per dollar of ...
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0answers
27 views

Second-Order Conditions under Kuhn-Tucker Formulation

How should I address second-order conditions if I use the Kuhn-Tucker formulation of constrained optimization as opposed to the usual one? For instance, suppose an agent wishes to maximize $f(x_1, ...
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1answer
30 views

which is an example of demand curve that is always inelastic/elastic?

Which class of functions have the property of being always elastic?and instead always inelastic?
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2answers
70 views

EMH: Difference between market price and fundamental value?

I am confused by the relation between stocks market prices and fundamental (or intrinsic) values stated by Efficient Market Hypothesis. How these deviates regarding to efficient market theory or are ...
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1answer
58 views

Comparing cost of living of one state with that of other states [closed]

In the past I read something like this: If basic expenses for family went from 100€ to 200€ but its wage went from 200€ to 400€ it can expend more than before. Weighting the costs of living ...
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1answer
22 views

Any drawback from printing money to pay for national services such as the NHS? [duplicate]

Why can't we just print money to build national infrastructure services such as an additional hospital for the NHS? This would create growth, allowing more doctors and nurses to come through but more ...
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2answers
28 views

Correlation between nominal bond returns and growth

I read the following passage and the bolded section has me confused: In theory, assets earn a low (or negative) risk premium if they tend to perform well when the economy is weak. When growth ...
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1answer
27 views

Consumption Set in Arrow-Debreu

I'm very inexperienced in mathematical economics, so when I came across the idea of the consumption set in Arrow-Debreu, I was a little confused. So for each element x in consumption set X, what does ...
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1answer
17 views

Difference type of crowding out effect in economics

In macroeconomics I came across two type of crowding out. First, in IS LM model where in classical case, when LM curve is vertical increase in government expenditures have no increase in output i.e. ...
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14 views

Does income equality correlate with less fraud?

If a population of people have less disparate income levels among themselves, are we able to predict anything about the level of phone scams, phishing emails, etc. perpetrated by members of that ...
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0answers
4 views

Dataset including decentralization of infrastructure spending?

Does anyone know if there exists a dataset of many countries (preferably developing countries and preferably with a time series) including the amount of spending on infrastructure by local government ...
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0answers
19 views

Kaldor-Hicks optimum allocation with externality

Suppose there are two individuals. Level of good h can be determined only by individual 1 and it has a positive externality on individual 2. To find Pareto efficient allocation, we add the utilities ...
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0answers
8 views

How to measure and demonstrate risks of technological uneployment or dualisation?

Our country is consudering its own strategy for artificial intelligence. Currently it is being considered at the level of ministerial secretaries and the next move is the plenary committe of ministers ...
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1answer
39 views

Is local non-satiation enough to talk about Walrasian Equilibrium being subset of Core

In Advanced Microeconomic Theory, the author mentions that the Cobb Douglas utility function is neither strongly increasing nor strictly quasiconcave over all of R+. But the condition of strongly ...
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0answers
16 views

Regression design, difference in differences

I plan to look at the regional differences of a policy effect. I would like to use the difference in differences approach however I am not sure how to assign a control group. I have data for time ...
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1answer
28 views

How to interpret the intersected information partition element of different actors?

In this paper, it said that given $\omega$ is the current state of the world and $P_1(\omega)$ is the unique element from the information partition $\textit{P_1}$ of actor 1 in which the player 1 is ...
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0answers
20 views

A problem: allocation of apartments

Setup: Trine owns an apartment in Copenhagen. She is willing to rent it out at any positive price. Peter and Simon lives together and are both students. They will like to rent the apartment for less ...
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0answers
18 views

Order of Marginal Effects in Ordered Regression Model

I'm looking to validate my understanding of marginal effects on the probability of an ordered probit model. I don't understand how ME is calculated in respect to some alternatives. For example if I ...
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0answers
8 views

Calculting the Exchange market pressure index

Does anyone knows how to calculate the exchange market pressure? I am using the following paper to calculate the EMP, but I am not sure if I am calculating the relative precesion correctly. My Stata ...
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0answers
14 views

How do you calculate the cost of down time in production?

We are looking at a process that will significantly reduce down time in production for (at least) one of our products. In addition to the saved labor and material costs, is there a way to calculate ...
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0answers
16 views

How to integrate technology lifetime in NPV

I want to calculate and compare the NPV for different ways of producing a good X. The NPV should be calculated for 30 years. The following technologies can be used for production: Technology A, which ...
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0answers
21 views

Production for multiplant firm?

A multi-plant firm will never produce at a plant with an increasing marginal cost when they own another plant with a decreasing marginal cost. Is this true? My reasoning behind this is that firms ...
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0answers
28 views

How does a government implement negative interest rates in practical terms?

We usually understand interest rates from a very simple story "you went to a bank ans asked to borrow money, the bank agrees but requires you to return an extra amount be the end of the loan term, ...
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0answers
19 views

Is the supply of a price-taking firm increasing in price?

Is the supply of a price-taking firm increasing in price? When the price goes up, this means that firms can make more profit. Therefore, they would want to increase their supply. Is there a way to ...
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0answers
34 views

Examples of textbook definitions of transaction costs, for a non-econ student

I'm not an econ major, neither am I taking it as a minor, however seemingly out of nowhere economics has jumped into my CS class when talking about the role of IT in reducing transaction costs of ...
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0answers
29 views

Why do commercial banks buy government bonds at negative interest rates instead of keeping cash?

I know commercial banks need to meet liquidity requirements, but why would they choose to invest their money in an instrument that is guaranteed to give them a negative return, instead of just keeping ...
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1answer
38 views

The assumptions of Rational Expectations Models

What are the assumptions between rational expectations models and how restricted are there for the following results of economic theory? Where can I find them all gathered in some textbook or in the ...
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1answer
24 views

echange rate from LOC/EUR to EUR

I have import values in LOCEUR (LOC is local currency). How can I obtain these values only in EUR? My data are from Eurostat, where external trade indicator is "Exports in million of ECU/EURO"
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1answer
52 views

Study guide (and…) for “Intermediate Microeconomics with Calculus” by Varian

I have been googling study guides, solution manuals and other helpful material made by professors. But I have not found anything useful. Q: Do you guys know anything that will make the book easier ...
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0answers
15 views

Spending despite fiscal deficit

This is going to be a rather simple question. Surprisingly, I did not find quite a lot of answers satisfactorily explaining my point. The question goes like this- The USA, under the Trump regime, ...
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0answers
21 views

demand for money

I am currently studying the demand for money by Blanchard. this model assumes that the amount of money held is basically related to transaction levels and the the attractiveness of bonds. i.e.: ...
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0answers
20 views

A question about independence of LATE framework (IV)

I came across the assumption of independence of the LATE in 2SLS: My first reaction is, why D1i and D0i are independent of the instrument Zi? Shouldn't the treatment and IV be correlated for the IV ...
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0answers
26 views

Cobb-Douglas demand yields a zero marginal revenue, monopolies don't exist?

From here and a pile of maths that I've done myself, $x_1 = \frac{a}{a+b}\frac{m}{p_1} \\ x_2= \frac{b}{a+b}\frac{m}{p_2}$ This yields inverse demand equations, when you have numbers stand in for $...

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